Size and knowing how to use it is best. Not only in trading...
Popular daytrading account size
- Thread starter Evermore2017
- Start date
Size and knowing how to use it is best. Not only in trading...
It's because most traders know their performance without looking at the stats. Focusing too much on stats doesn't help, it's the bottom line that matters. How much did you make and your drawdown, which you should know by heart anyway. My profit factor being up by 0.2, irrelevant as it depends on the market conditions.
Declines happen at a higher rate than gains. In this aspect, shorting is easier. Holding naked shorts for too long is what kills traders. Long side is mostly drift, in which case you could stick with investing and not trading.
L
lovethetrade
You need an account size large enough to give you adequate exposure to a diversified portfolio of assets because it's the big movers where you make your money. It might be the S&P today, gold tomorrow, bonds the next day, oil the day after that etc. If you don't have enough coverage, you won't catch enough big moves to really compound.
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Until you learn and perfect what you want to do, keep your account size to a minimum. I only trade the indices and my rule is 1000 times what ever $ per point I am using. So if you are using $10 a point you need $10k. If you lose $1000 drop your position size back to $9 etc. By the time you get to zero you will have lost many 100's to 1000's of points and I would suggest to you that trading is probably not for you. If you increase your account size. Well done!! Scale your position size up accordingly.
If you are really good in daytrading, you just need to trade the indexfutures and forget the rest of your huge list. How can you follow dozens of markets simultaneously?
I just watch the ES and with the leverage they offer your returns can be very high.
I'll tell you why. There's a lot of days the futures are dead were you might make only 1 or 2 trades . Every single day there's hot crazy stocks going wild that can be traded. For instance all the fang stocks, vaccine stocks are moving regardless of what the indexes are doing .Also you now pay zero commission on stocks so that can say a hard core day trade $500 plus a day . I recall days many years ago when i traded up to 800k to a mil shares in a day having $3k worth of commissions .Thats a huge savings
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It is very rare that I see dead days in the ES. But all depends on how your system reacts on the market. And how good your system adapts itself to the volatility of the market. Most people have a static system, not a dynamic one. What looks statically dead can be dynamically alive.
About commissions: I gave last week 3.12% of my net profit back for commission and fees. But the much bigger leverage I can use in futures compensates largely that cost. In stocks I can never come close to the returns I make in futures. And stocks can be dead too.
Shakespear said:
A day trader needs to know how to go long and short.